Elon Musk announced that he is putting the Twitter acquisition deal on hold until the social media platform can prove less than 5% of its accounts are fake or spam. Is the Tesla CEO getting cold feet on the deal?
Now that Twitter’s board has approved Musk’s offer to buy the company and take it private, it looked like a done deal, pending working through some details and bringing the proposition to a shareholder vote. But during an interview earlier this week, Musk started to talk more tentatively about the deal and wouldn’t share his level of confidence in it actually going through.
Now he went a step further and announced that the deal is “on hold” following a report from Twitter about the number of spam and fake accounts on the platform:
The Tesla CEO said that he is still “committed to the acquisition,” but it is “temporarily on hold”:
“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.”
In a new filing this week, Twitter said that it estimates that 5% of its 229 million active users are spam or fake accounts.
Part of Musk’s plan for Twitter is doubling the effort to remove spam from the platform by either making them financially unviable and/or by authenticating all real users and prioritizing replies over those from unauthenticated users.
As part of the acquisition agreement, if either party, Musk or Twitter, fails to complete the deal, that party will have to pay the other a $1 billion fee.
Yesterday, we reported on Musk looking to finance the Twitter acquisition without loans backed by Tesla shares as Tesla’s stock price fell.
Is Musk getting cold feet and wants a way out? Let us know what you think in the comments section?
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Author: Fred Lambert